Thirlwall Law: Why Hasn't Pakistan's GDP Grown Faster Than 5% Average Since 1960s?

[Peace be there]

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Economic growth is driven by a combination of population growth with human development, assimilation and development of technology (ie. industrialization, robotics, etc), and good financial policies (strong savings, efficient allocation of capital, sound monetary and fiscal policies).

Pakistan has struggled in all these areas. I would say most of past growth has been driven by population growth with some low level human development with some low level assimilation of technology.

Financial policies have been a complete disaster. Too much influence by incompetent politicians (both PPP and PML) and indifference by past military leaders (with the exception of Ayub Khan). Hopfully PTI, SBP and COAS can work together toward sustainable economic growth.

 

[nahtanbob]

China is the world largest consumer market even in dollar terms. Scrapping FTA is not a good idea. In theory, our low end manufacturing should be cheaper than China's. We need to focus on competitiveness not protectionism.

that assumes labor is the most important cost for a given product

 

[Figaro]

that assumes labor is the most important cost for a given product

Especially with the rise of automation, unskilled labor becomes even less important. This is one of the reasons why countries with extremely large uneducated labor forces will find it basically impossible to replicate the manufacturing successes of Japan, South Korea, Taiwan, and most notably China. The time to leverage masses of cheap labor is quickly running out.

 

[CrazyZ]

that assumes labor is the most important cost for a given product

You have to start at the bottom. Labor costs are still important in some areas. Sewing garments for example. Robots are not that in this area...even today.

 

[nahtanbob]

You have to start at the bottom. Labor costs are still important in some areas. Sewing garments for example. Robots are not that in this area...even today.

I am not arguing with you. But as @Figaro pointed out it is not the most critical component for most products